India is a middle-income developing economy with notable state participation in strategic sectors. India is fast becoming a global manufacturing destination and has the potential to export goods worth USD 1 trillion by 2030.The country ranks second globally in coal, cement, steel production, food, and agricultural production, third in electricity generation and oil consumption, and fourth in automobile production. Given the economy’s growth potential and the large population, growth in energy demand in India is expected to be significantly higher than all other countries, with demand rising by 3 percent annually (1). Despite the country’s historical dependence on fossil fuels – particularly coal – 60 percent of the growth in energy demand is expected to be met through renewable energy sources owing to the increasing policy push for the sector.
In terms of installed capacity, renewables comprise of about 27 percent of India’s installed electricity mix of 395 GW (1) as of 2022. This however excludes large hydropower plants (more than 25 MW capacity), which themselves have a share of 12% share in the installed capacity.
India is aiming for net-zero by 2070. As of February 2023, the total installed power generation capacity in India stood close to 412 GW, of which about 236 GW capacity is based on fossil fuels, while 168 GW of capacity is based on renewable energy sources, including hydro power (2). The country remains strongly committed to this target which can be evidenced from initiatives in the field of renewable energy and biofuel blending. Green Hydrogen is also a priority of the Government of India as this is touted to be the fuel of the future.
Hydrogen demand in India for the year 2021 and 2022 is estimated to be 8.5 million tonnes and 9.1 million tonnes, respectively. This demand from the legacy sectors is expected to increase to 11 million tonnes by 2030 (3). The legacy consumers of hydrogen include the ammonia production process in the fertilizer industry and the desulfurization process used in fuel refineries. These two industries currently account for over 80 per cent of the hydrogen consumption, primarily derived using natural gas through steam methane reforming (SMR).
The other major consumer of hydrogen in India is the steel industry based on direct reduction of iron ore (DRI). DRI steel production accounts for around 35 per cent of the total steel produced in India, which is derived from more than 300 DRI steel mills located in various parts of the country. Most of the DRI units in India utilize hydrogen in the form syngas obtained from coal gasification. The large dependence on coal is due to the relatively good availability and low pricing of Indian coal compared to natural gas.
India's National Hydrogen Mission, announced in August 2021 and approved in Jan 2023, acts as a policy enabler to attain its climate targets and become a hub for green hydrogen and green ammonia production.It acts as a policy enabler to attain its climate targets and become a hub for green hydrogen and green ammonia production. The policy mechanism targets to reduce India's dependence on fossil fuels and scale up its renewable energy capacity by setting up green hydrogen production facilities and bringing down the cost of green hydrogen. India’s geographical location, climatic conditions, and abundance of renewable energy resources make it a favorable location for producing green hydrogen at low prices by 2050.India's National Green Hydrogen Mission (NGHM) sets out a roadmap for using hydrogen to meet its climate targets and make India a green hydrogen hub. The aim of this mission is to enable India to become a global hub for production, usage and export of green hydrogen and its derivatives.
The National Hydrogen Mission lays down the following expected outcomes for green hydrogen in the country by the year 2030:
Under the Mission, India proposes to adopt a phased approach towards its implementation. The first phase focuses on creation of demand and building adequate supply by increasing the domestic electrolyser manufacturing capacity through incentives aimed at indigenization of the value chain. On the demand side, the first phase is expected to stimulate green hydrogen usage in key end-use segments and initiate pilot projects in other hard-to-abate segments.The second phase to be undertaken towards the end of the decade is expected to scale up utilization of green hydrogen and enhance R&D activity in the sector to help increase penetration across all potential sectors leading to deep decarbonisation of the economy.The Mission proposes two distinct financial incentive mechanisms, targeted at domestic manufacturing of electrolysers, and at production of green hydrogen. In addition, the Mission also provides for enabling mechanisms, including enhancement of ease of doing business, infrastructure and supply chain, regulations and standards, skill development and public awareness in the sector.Some key elements are:
|Overall GH production target||5 MTPA by 2030|
|Renewable Energy Capacity Installation||125 GW by 2030 (to support the GH target)|
|Carbon Dioxide emission abatement||50 MTPA by 2030|
|Overall financial outlay||~ USD 2.38 Billion|
|Job creation target||6,00,000|
|Overall investment target||~ USD 97 Billion|
The National Hydrogen Mission sets an aim to harmonize regulations and standards with internationally accepted norms to ensure inter-operability of technologies, and incorporation of global best practices. The Mission also aims to notify necessary regulatory provisions, regulatory amendments and standards that will permit operation of hydrogen-fueled vehicles and other applications within a period of 12 months.
India ranks fourth globally in total renewable energy installed capacity (including Large Hydro), fourth in wind power capacity & fourth in solar power capacity (4) . India’s installed renewable energy capacity has increased 396 per cent since 2014 and makes up about 42.5 percent of the country’s total power generation capacity. This rapid growth in India’s renewable energy sector justifies its rank as the third most attractive global destination for renewable energy investment (5). Solar energy potential in India is more-or-less uniformly distributed across the geographical span of the country, with pockets of slightly higher solar irradiation concentrated in the western region of the country and certain parts in the northern mountainous regions of the country. As a result, solar PV plants located in most parts of the country yield more than 4 kWh per kWp on an average sunny day. The climatic conditions in most parts of the country receiving more than 300 sunny days every year also contribute to the high levels of solar energy potential in the country. The National Institute of Solar Energy has assessed the country’s solar potential of about 748 GW assuming around 3 percent of the wasteland area will be covered by solar PV modules.
The Green Hydrogen Mission identifies various infrastructure initiatives for development of green hydrogen ecosystem in the country. The Mission proposes to identify and develop regions capable of supporting large scale production or utilization of hydrogen as Green Hydrogen Hubs (with trunk infrastructure allowing for pooling of resources and achievement of scale). Green hydrogen mobility corridors will be set up by setting up refueling infrastructure and hydrogen supply arrangements to connect the proposed Hubs. Additionally, infrastructure at major ports is expected to be developed as Green Hydrogen Hubs would be attracted to coastal zones in the vicinity of such ports.
Many global and Indian companies plan to have an installed electrolyser manufacturing capacity of 13-14 GW/yr.
|Consortium or Individual Company||Planned Electrolyser Mfg. Capacity (GW/yr)|
|Adani – Cavendish (5)||5.0|
|Reliance – Stiesdal (6)||2.5|
|Greenko – John Cockerill (8)||2.0|
|L&T – Hydrogen Pro (10)||1.0|
Provisions of India’s National Hydrogen Mission, combined with enabling factors present in the country ranging from a vast renewable energy resource base, large demand potential and the availability of infrastructure has gained the attention of various corporate entities in the country. Companies from both the private and the public sector in India have announced plans for investing in the emerging green hydrogen sector in and scaling it up in the long term. Some of the notable investment announcements include: